Paternoster in pensions deal

Paternoster, the pension buy-out specialist set up by former Prudential executive Mark Wood, has secured its first deals to take over company pension schemes.

Among the five it has secured is the Cuthbert Heath Family Plan (CHFP), the pension scheme of a former Lloyd's of London underwriter. There are around 50 pensioners in the scheme, which is undestood to have assets of less than £10m.

Paternoster would not give details of the other schemes as the pensioners have yet to be informed. Of the five, three have assets of up to £10m and two are valued at between £10m and £50m.

The deals mark Paternoster's first move in the bulk annuity market, which is estimated to be worth up to £1,000bn, since it received authorisation from the Financial Services Authority in June. Paternoster will begin paying CHFP pensions on December 15.

Chief executive Mark Wood said he was still working on other deals, adding: "We've got £500m of equity and there's no gearing on the balance sheet, though we could gear it up in future. That allows us to write £6.5bn of pension liabilities."

Graham Pitcher, director of GP Noble Trustees, the independent trustee responsible for the buy-out of the scheme, said: "As trustees, ensuring the long-term security for the scheme members was paramount. We are confident that the solution offered by Paternoster delivers the best possible outcome for our pensioners and the remaining members."

There have been several new entrants to the bulk annuity market, which is dominated by Prudential and Legal & General. America's AIG and Dutch insurer Aegon, which owns Scottish Equitable, have said they intend to enter the market while another former Prudential executive, Isabel Hudson, has set up her own vehicle, Synesis Life.

Companies are increasingly keen to offload their pension liabilitiesas as they are treated like debt on a balance sheet under new accounting standards.